Council Politics Taint Discretionary Funding

More transparency is still needed in the discretionary funds distribution process, according to the report released this week by Citizens Union, a government watchdog group that also publishes “Gotham Gazette.” Back in 2008, a federal investigation revealed that the City Council had been giving money from the Council’s budgeted discretionary funds to fictitious organizations since 2001. The revelation was particularly embarrassing for Council Speaker Christine Quinn, who had been an advocate for increased transparency in the city budget process.

New York City Council Speaker Christine Quinn was particularly embarrassed by a 2008 scandal over innapropriate use of City Council's discretionary budget. Even though reforms were put in place since then, a new report says more improvements should be made. Flickr/Ennui Poet

The Council subsequently enacted a series of reforms to make the process for distributing the Council’s discretionary funds more transparent.

Although these reforms have helped increase accountability in the budget process, a new report indicates that further improvements are still needed in the Council’s budget process. More transparency is still needed because Council politics still play a large role in the discretionary funds distribution process, according to the report released this week by Citizens Union, a government watchdog group that also publishes Gotham Gazette.

“We just want to build upon the reforms that have been made, and make the process even better,” said Dick Dadey, Citizen Union’s executive director.

Report’s Findings

The report analyzed budget data from fiscal years 2009-2012 and found a wide disparity in how much discretionary funding different Councilmembers receive, with committee chairs and more powerful Councilmembers receiving a significantly larger share of funds than newly elected members.

There is also no correlation between the level of need in a given district and the amount of funding it receives, the report found. This means that some low-income Council districts have received a large share of funding while other low-income districts have been left out.

The report said that these funding discrepancies exist because the Council Speaker has too much power in the distribution of the Council’s discretionary funds, which totaled more than $578 million in last year’s budget.

“The City Council Speaker and other leaders have too much say in what gets distributed. One can argue that that’s a way to keep the Council in line,” Dadey said. “But we don’t think that city taxpayer money should be used for such political purposes.”

In the report Citizen’s Union makes a number of recommendations to make the budget process more transparent and to distribute funds on a basis that takes a district’s socioeconomic conditions into account.

Speaker Quinn agreed with a number of the report’s recommendations. But she added that distributing funds based solely on economic need would take away the flexibility that the Council needs to make year-to-year budget adjustments.

Discretionary Funds

The Council uses discretionary funds to pay for local projects and citywide initiatives not included in the Mayor’s budget.

Discretionary funds are divided into capital funds, used for building projects like school renovations, and expense funds pay for initiatives like after school programs. Capital funds totaled more than $428 million in fiscal year 2012, and expense funds totaled more than $150 million.

Councilmembers receive capital and expense funds to pay for projects – usually within their district – based largely on the Council Speaker’s discretion, the report found. The Council Speaker distributes all capital funds and a portion of the expense funds to the individual Councilmembers at her discretion. Last fiscal year the Speaker disbursed $459 million out of the $578 million in discretionary funds.

Watch Now

Funders

MetroFocus is made possible by James and Merryl Tisch, Bernard and Irene Schwartz, Charlotte and David Ackert, Jody and John Arnhold, Rosalind P. Walter and the Dr. Robert C. and Tina Sohn Foundation. Corporate funding is provided by Mutual of America, your retirement company.